Fonterra's milk products chief resigns after botulism scare

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WELLINGTON (Reuters) - The head of Fonterra’s New Zealand milk products business resigned on Wednesday, less than two weeks after the world’s biggest dairy exporter said some of its products could contain a bacteria that can cause botulism.

The Fonterra logo is seen near the Fonterra Te Rapa plant near Hamilton August 6, 2013. REUTERS/Nigel Marple

Fonterra, New Zealand’s biggest company, said Gary Romano resigned as managing director of NZ Milk Products with immediate effect. It gave no reason for his departure. “Gary has made a significant contribution during his time at Fonterra and we respect his decision,” CEO Theo Spierings said in a statement, adding he would take temporary charge of the business.

Fonterra said on August 3 it discovered the contamination in some of its products, which were shipped to customers including The Coca-Cola Co, Danone SA and China’s Wahaha in nine countries, and used to make infant formula, sports drinks and animal feed. Potentially tainted products were taken off shelves in China, Malaysia, Australia, and New Zealand. Other countries also took measures to restrict imports.

Romano was the first Fonterra official to appear publicly and face the media when the contamination scare broke. He came under fire for giving incorrect information about a recall of infant formula in New Zealand, prompting Fonterra to apologize to Danone-owned Nutricia, which marketed the products.

The head of the dairy section of the New Zealand farmers’ lobby group said Romano’s resignation looked premature. “I’m very surprised that he took that responsibility. I’m not so sure heads should roll even before the inquiry is finished,” Willy Leferink of Federated Farmers told Radio New Zealand.

“Maybe the personal pressure was far too much ...”

There are four enquiries - two by Fonterra, one by New Zealand’s government and another by the food safety authority - underway or planned to look into the cause and handling of the contamination scare and the potential international fallout for dairy dependent New Zealand.

Spierings has apologized several times and set up the two internal inquiries into the contamination, which Fonterra has said was caused by a dirty pipe at one of its plants.

Russia, Belarus, and Kazakhstan still have a ban on Fonterra products, although they received none of the tainted whey protein product.

Units of Fonterra’s Shareholders Fund closed down 0.4 percent at NZ$6.90. The units traded at NZ$7.12 before the contamination scare, and slumped to as low as NZ$6.50 on August 5.